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Business News Week In Five
The music business week in five – Friday 21 Jan 2011
By Chris Cooke | Published on Friday 21 January 2011
So, what a doomy gloomy week, hey? First HMV’s debt-related challenges spilled over into the mainstream news agenda again, and then we got a Digital Music Report from IFPI full of depressing statistics and some tough talking about the need for governments to step up their anti-piracy initiatives, just as our government’s three-strike-style plans hit the time consuming hurdle of a judicial review. And all this amid fears in some quarters that the upcoming Hargreaves Review of UK copyright law will favour the tech industry over traditional content creators. Shall we just all slit our wrists now and be done with it. It would save me having to edit up the first ever CMU podcast.
But you know, I remain optimistic about the future of the music business, and not only because I’ve just drunk a can of Pepsi before eating breakfast. As we’ve said before, while copyrights should be defended where they can, the real challenge for the music industry isn’t some uber-anti-piracy initiative, but working out a system where all bands can maximise all their revenue streams – whether they by IP, performance or fan relationship-based – and whereby a slice of the profits from all those revenue generators (rather than just one) is pumped back into new talent. And as I’ve also said before, out there entrepreneurial managers, label owners and artists are starting to do just that, and we plan to have a bunch of them telling all at The Great Escape in May, which allows me to plug one again that you can get early bird tickets for a mere £80 at escapegreat.com.
This time next week I should be able to give you details about some of the bands you’ll get to see if you do join us in Brighton in May, so look out for that. Meanwhile, back to now and all the doom and gloom of the last seven days. Actually, I’ve managed to find some good news from the last week as well, see if you can work out which is which.
01: Some of HMV’s suppliers lost their credit insurance as concerns grew about the retailer’s ability to meet its loan covenants. That could mean distributors refusing to supply HMV with stock, because should any bills go unpaid said suppliers aren’t insured for lost revenue. But with HMV, the only major player entertainment retailer left on the high street, that’s not likely to happen, and, indeed, the big cheeses of the UK record industry (majors and indies) wrote to The Times yesterday to confirm they would continue to supply and support the HMV Group. CMU reports | Independent report
02: Sony and Universal closed the release window. This means that as soon as new singles are played on the radio, they will be made available by digital music stores and streaming music services. Some have argued that it is during the lag between songs appearing on radio and being made available on iTunes et al that lots of young music fans download tracks from illegal sources. Certainly it gives said illegal downloaders a good excuse – “but I want it now and I can’t buy it legally”. The majors like the release window because it allows them to build hype to maximise first week sales and ensure a higher chart position. But Sony and Universal this week accepted it was an out-of-date marketing approach in the digital age. Pressure is now on EMI and Warner to follow suit. CMU reports | Popjustice report
03: It was widely rumoured Sony US had signed up to Spotify. The New York Post said a deal was “days away” last weekend, and then various news media, including the Wall Street Journal, started citing insider sources as saying a deal had been done. It would be Spotify’s first deal with a US record company, execs from which are nervous about the impact the free element of the streaming music platform might have on rival pay-to-use services already live in the US. Of course, Spotify will need more than just one major in place to launch Stateside. CMU report | C-Net report
04: Google supported MP3tunes in its EMI litigation. It was revealed the web giant had submitted a paper to the court hearing the EMI v MP3tunes case speaking in the latter’s favour. MP3tunes is a digital music locker service, similar to that Google is believed to be developing. The EMI lawsuit will test whether, when digital storage companies allow users to upload their MP3 collections to a server and then stream them to any net-connected device, if a licence from the content owners is required. EMI say yes, MP3tunes say no. Presumably Google would quite like a judicial “no” on this issue also. CMU report | P2pnet report
05: Comes With Music closed as We7 expanded. Nokia announced it was shutting its all-you-can-eat download service in all but six of the 33 territories where it had launched. Comes With Music may have offered unlimited downloads but, outside of China, the tracks came with DRM locking them to the device they were downloaded to, making the service rather unattractive to consumers. On the upside for the digital music market, though, UK-based We7 did its first bit of international expansion, launching its streaming and personalised radio service over dere in Ireland. CMU report on Comes With Music |CMU report on We7
And that’s it. Do look out for the all-new CMU Weekly with extra podcast coming your way this afternoon. Sign up or check it out here: www.theCMUwebsite.com/weekly
Chris Cooke
Business Editor, CMU
